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Taking shortcuts with estate planning?

| Jun 18, 2021 | Estate Planning

Whether it is due to financial challenges, not realizing the importance of planning ahead, or simply wanting to put off the inevitable, many Americans are falling short when it comes to getting their house in order for the sake of the loved ones who will survive them.

According to a recent report, two-thirds of adults in this country do not have a will. When asked why, more people now than in previous years are saying they simply don’t know how to start the process.

Sadly, going online to find answers or trying to take shortcuts to estate planning can lead families down a difficult path of unnecessary strife, as was apparent in a recent court case involving the use of online estate planning forms instead of professional legal advice.

There is no one size fits all power of attorney (POA)

When Mercedes Goosely of Pennsylvania named her son, Joseph, to act as her financial agent under a power of attorney, they used a downloaded POA form from the internet. Little did they realize how much trouble it would cause the family years later to discover that there are different types of POA’s, some of which cannot be used legally under certain circumstances.

As Joseph and his mother assumed that the POA took effect immediately after it was signed, he was able to perform a number of services on her behalf for several years, routinely conducting affairs with her knowledge, including listing the family home for sale when Mercedes went into a nursing home.

Joseph’s brother, William, was living in the home at the time and decided to take Joseph to court when Joseph ordered him to leave. Only during court proceeding did it become apparent that this POA was a springing POA. A springing POA will only take effect when the principal becomes incapacitated, which must be proved by a letter from the principal’s doctor. As it turned out, Joseph had never had the authority to act on his mother’s behalf.

Three types of POA’s in New York

In New York State, there are statutory forms for a Nondurable, Durable and Springing POA. While it is not required to hire an attorney, a POA is a legal document that grants the agent such significant powers to make important financial and other legal decisions for the principal, that not setting it up correctly could spell significant trouble.

When taking a comprehensive look at your estate planning needs, it is vitally important to have the guidance of a dedicated and knowledgeable legal team that will help you to manage and protect your assets so that you can provide for your loved ones after you are gone.